TWIG #401: Blizzard Goes All In, Roblox Breaks Out of Its Own App and Aniimo Nails Launch Day

[music] Twig episode 401 with your regular chef and host Philip Black.
Here we are. I'm joined today by
Eric Crest, Blizzard Union rep according to this the notes here.
Who who wrote this? Josh Chanley, you bet. Seattle gaming mayor. Great.
Thank you.
This is going to go off the rails from the very [laughter] beginning.
Already Jen's like, "What the
I can already see the emojis being sent." All right, we have Oh my god. Talk about an episode. We've got Roblox's biggest play yet at RDC. What is going on? What has been all the news? Eric might have a change of opinion about Roblox. Blizzard. We've been talking about Swagger being back. It looks like they finally did a capstone at Blizzcon and they have some huge announcements. Eric has a World of

Warcraft take. What a week for Blizzard. We have games. Games are finally back. I thought that we were going to be just looking at each other uh solemnly until Grand Theft Auto launched. We have two, I would say, out of the blue launches. And Nemo, which I've been hyping up, has finally hit Steam. It launched today. Eric has been playing it. Let's talk about it for a moment. We'll do full in-depth coverage next week. And War Dogs, the first person shooter, has hit 2 million in sales out of like nowhere. Oh my god, what is going on? It certainly will be covered in shooter monthly, but Twig 401 Gaming is back edition is here. Gentlemen, any banter? Any banter this week?
I really can't wait to talk about Blizzard. I thought that was it was an amazing event. The one thing that happened just this yesterday was uh IGN cut a bunch of people and and really people that are beloved. I mean I've been listening to IGN for like over decades decades and it's very sad how a lot of these outlets are just closing up. You know Kotaku I could give a [ __ ]

because they were terrible but uh IGN very very sad. So kind of funny is the only like really independent one that I listen to on a regular now and some of the guys are leaving from IGN. So it's not gonna be nearly as good. So anyway, anything for you Josh? I'm missing out on the Amplify conference over in Croatia for for that love and so hello to all my friends over there. But no, it's been a it's been a very quiet week. Um what's the most exciting thing that's happened in adtech? MCO is rebranded. Apploven is no longer serving banner ads. Uh, not not too much going on US version.
We got to bring up the energy, Mr. Josh. [laughter]
Fine. I mean, I I know Adtech is like the the devil incarnate, but like do you
I'm sorry. Did you say banner ads?
Yeah, talk about banner ads.
Uh, speaking of banner ads,
[ __ ] adte. [ __ ] ad tech.
We have a shill. Mishka has a new

podcast out with the CD Project Red joint CEO Michael Noacowski and this is one he also filmed at the Aren conference. I saw his arm podcast and I thought it was great. Mishka actually did a really good job. This was a inside look at arm and how the biggest deals get done and like a surprising amount was shared candidly. I was kind of surprised what I learned coming away from it. like Supercell's early days, the role of secondaries, who takes them, who doesn't, just like very matterof fact.
Yeah, I think Mishka's pulling it in. He's he's he's doing his job.
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Speaking of doing their job, Roblox has a number of updates that they have shared with us at their developer conference. One of those is a pretty monumental shift to the platform. You can release your game as a standalone app across PC, mobile, and console was one of the things they announced. They announced browser play, so you'll be able to use your browser to access Roblox games. They also have offline play. They have announced more tools in terms of creation. So, you might see things like a puzzler on the Roblox platform. The meta that's dominated of these 3D worlds may not be something that's persisted. They also announced this wallet. So now if you're a developer, you're going to get a Roblox credit card, not really beating the company town credit allegations. And what this does get you though is immediate access to your Roblox funds, which is actually pretty significant because you can reinvest in UA quicker if you can get your money out in a day

versus, you know, what might be a multiple weeks beforehand. Gentlemen, how did you feel coming out of the Roblox Developer Conference? Were you ready to jump on stage? you know, the this this the standalone app stuff is actually kind of really interesting. It actually puts the onus on the developer now to like help market the game. So rather than using the platform itself. So in my understanding, all the backend tech is going to be still roadblocks and still going to be with that ecosystem. So there is a chance that they could go off the reservation and start doing direct monetization of the user base outside of the ecosystem, but I I don't think that's intended, frankly. But we we will see. But it just gives a lot more flexibility, I guess, for the publishers to kind of, you know, manage distribution or manage, I guess, marketing potentially on their own, right? I mean, is there a chance that they could be doing user acquisition? I don't think any actually any game on the Roblox ecosystem could probably do user acquisition profitably, but but I mean

it's possible. What do you think, Josh? Is that possible?
No, I don't think so. The standalone apps is really interesting. Uh especially, you know, with the way that algorithm has been changing the last couple of quarters. I don't know. Imagine running a Roblox studio right now. You can't predict what will or won't get visibility. You know, that that kind of uncertainty sucks. So seeing the the browser and the standalone stuff, especially the standalone, being able to like ship your game as its own entity, you know, built on the Roblox Infra, but like outside the Roblox app, it's cool. You know, it's more entry points into the ecosystem. I wonder if it could create more retention and a better user relationship between like the actual developer and the users. I wonder if these will just be zombie apps, though. The thing that that's cool though is that you can create a basically an app on your phone which you can go directly into the game that you want to play, right? So that that I mean from a user perspective that makes a lot

of sense like if you're constantly playing the same game and again I keep saying this but I'm spending way too much time on LinkedIn is that like one RDC announcement of all this [ __ ] now everyone's saying oh Roblox is back right like it was just a few months ago that they changed the algorithm to HD and the stock took like a 40% hit right now the algorithm is moving back right which is really the underlying thing that's going on right now. And this month, if you actually look at the top game, it's steal an egg by a factor of 6x to the next game, right? A game where basically adults pay money for speed boosts and weapons to steal eggs from children. Yet another game that is basically torture for children, right? So, forget the integrity of the platform. Let's justing switch that algorithm back right away. So, and the stock's up 20%. So, let's good. We're good, right? I think they need to find their [ __ ] lane. That's what I think they need to do. I think RDC was

positive. The stock is still down 60% over the last year. They got a lot of room to go, right? And again, as I've always said, this is a hedge fund hotel, so be careful about buying the stock.
What actually did you guys hear that aggressively moved the needle?
So, here's what I don't understand, Josh. If you can do a standalone app which implies its own app store listing, what I would imagine is that you're still running the Roblox engine and you're still gated by a mandatory Roblox signin. And so that changes the value proposition of Roblox, right? It changes its point of integration, the value stack from being the platform quite literally where you aggregate all demand. I immediately hit the Roblox button to being commoditized almost to an engine and then basically a set of services. I actually think that's fairly major. But the thing that feels most consequential here is even if I'm forced into the Roblox engine as a part of this, like let's say the rivals, the shooter game spins out and does this.

Can is there anything at the app store level that still lets me do user acquisition? Like is there any attribution I can have just by the fact it's an app store listing like scan where I don't have to like I'll never get past the fortress of the Roblox engine. Is there anything I can do outside of that? the scan is literally useless. Scan scan has no no value for for user
acquisition. So the question is is like can you slap an MMP on it and and buy either like Meta, Tik Tok, YouTube or or maybe you know app level or inapp ads but the the problem is is it's friction like remind me what was the impact of the changes to the mandatory sign in and all the age gating again it was pretty material to DAO right and so if you have the standalone app and you have that friction point and you're competing on UA with standalone apps built on Unity without that friction point. And these Roblox devs have only been in the Roblox ecosystem and these Unity devs have have

been in this free-to-play system or or even or on Steam forever. Who Who's going to win that fight? You've got the the more experienced teams in this environment with a um a massive built-in advantage because they don't have the trust and safety requirements of public company. How do you how do you beat a Chinese app with with Roblox requirements?
You use your Death Star, which is Roblox, right? That's like how you funnel [laughter] people to your individual apps, right? It's their it's their Farmville. You crossromote.
That's still the exact same distribution system as as being inside of Roblox.
Yeah. So, what's what's truly incremental here? Why won't these all just become zombie apps where there's like a little bit of organic? Maybe it's a bit easier to share. Verality is a bit easier to share the game, but there's not anything that like unlocks in my view at least, there's not anything that unlocks something cool and and new. This is a lot of like potential new entry points into the ecosystem. It's like new

doors, but like where's the traffic? Who's going to open who's going to walk through that door? How how will this moved out? I don't know. It
it feels more convenient than actual improving discoverability, right? More convenient for the existing players than it is for real discoverability. But we'll see how it evolves. All right, next. Blizzard.
Blizzard. Yes, Blizzcon. Everything that was announced. Let's just quickly go through the big announcements. We have Warcraft Forever, which is a reinvisioning of the original game. We have this Diablo Netflix thing. I don't know exactly what that is. Diablo 5 apparently is a couple years out. That was an early announcement. We got a trailer. We have a new Starcraft openw world shooter, which apparently is single player. I don't know who's working on this. Eric, is this Korea? I don't know what's going on. Which team is this? There was a couple updates to Hearthstone that were kind of like run-of-the-mill. We got a Warcraft 3 expansion. We got a Heroes of the Storm hero. I mean, this just felt like a victory lap.
What's going on?
You forgot the expansion. So, World of

Warcraft expansion.
That's right.
2027.
As far as I understand, open world shooters done is being in in Irvine. I don't think the Korea guys are working on other things. They work on Overwatch. Look, I I'm a huge Blizzard fan. Clearly, [laughter] I've been playing World of Warcraft like a crack addict the last few months. This was by far kind of the best BlizzCon I've ever seen from a product announcement perspective for sure. I think I do kind of own apology to Miss Joanna who is running the show out there because my assumption was that she did not have the chops to actually manage creatives at a studio like Blizzard. And I think that's exactly what I said back then. it is clear that she not only is kind of currently managing the business pretty well, but she has clearly put these studios to task, right? So like like in order for them to get up there and feel comfortable about announcing all these type games, that is quite a testimony to her ability to get [ __ ] done at the

studio. But we'll talk to that in a minute. Look, the World of Warcraft strategy is [ __ ] impressive, right? like the fact that they have the last titan which is the 2027 expansion for the core game. They have WoW forever and they have WoW legacy game. I can't forget the name of it. So basically three different SKs is is insane right now. I could geek out about this and we're going to talk about a little bit about later, but it is crazy like how much World of Warcraft you could actually [laughter] play in the next couple months. Like is it is nuts and if you actually play the game and you're playing it, they've done a really good job of actually building this thing out. The third thing is like Diablo 5, like you have to understand if Diablo 5 actually comes out in 2029, that's like six years instead of 11 between Diablo. Like that is that is impressive in and of itself, right? Because Blizzard has historically been horrible at getting these games out. And the open world shooter in 2030 also impressive. Like the fact that they are going outside of their genre comfort

zone and to build something else is kind of like the riot of yester year, I suppose. So this is again a clear departure from Blizzard in its history, right? These are really do is setting bold expectations and setting these release dates that areing miles away, right? But it makes sense given the current landscape of what's happening at Xbox. And this is where my cynical side comes out because as impressed I am and excited I am about what Blizzard is doing, there's a lot of warning signs that you have to think about when it comes to this sort of thing. First of all, this feels very charged in the sense that this is trying to make sure that the overlords at Microsoft or Xbox, Miss Chararma and the rest of her douchebag, you know, tech bros are happy, right? It basically justifies Blizzard's funding for the next 3 to four years, right? If if history is any guide to this, by the way, if you actually take history into account, none of these games are coming out. None of them none of them are coming out on

time. But this has never happened at Blizzard, right? Particularly Divi Diablo 5, right? That's impossible. And then the Scarstrap shooter. If you look at history alone now, maybe Joanna is running a different ship and the impetus and the and and the and the drive is a lot more aggressive now because of what's happening at Microsoft. That may be the case. The second thing that worries me a lot is that the wow team is big, but it's not thating big, right? You can't have three live service MMOs working all in tandem with a team of people down at Irvine, right? The most expensive place to develop on in the world. It's like it feels scary, right? And exactly what is the hope to accomplish here? Are you trying to bring people back? Are you trying to get new users? like what is the actual TAM for three different MMOs in the World of Warcraft, right? I I don't know. So, I

think there's a lot of cannibalization potential there and and I don't really know exactly what they're hoping for on this. Now, me for as a focus group of one, I will be playing all three, but and then the Starcraft open world trooper. I said this on LinkedIn. Look, I think this is super risky, but it makes a lot of sense given the IP. the IP lends itself to this sort of project. I think it's going to be a huge challenge for the studio. I don't know if they have the talent to actually execute against something like this. They certainly don't. They've never made anything like this before. So, it should be cool, but it's so far out. Like, you have no idea, right? Um, what's really cool, I think, for everyone who's fans of Blizzards is like with this kind of skew plan and this kind of thing in place, like they are not going to get touched by Chararma and the tech bros, right? So, they seem to have free reign to basically make this [ __ ] happen. And so, let's hope they can do it because if they can execute this, I think they will be in really, really good shape. But, I'm actually really excited for the future of Blizzard and the fact that they're making the investments required.

If Activision Blizzard was was still independent, which is kind of a a funny word to use for a company that size, but if they were still independent, would these timelines be the same? Eric,
they would never have announced this much [clears throat]
content in one go ever.
Isn't that concerning that like the the ownership structure is changing behavior in this way?
It's like Thunderdome out there, man. Like you got to justify your existence, dude. Like you you you thrive or die, dude. It's like they got to go for the go for broke, you know?
Is this like a three years of job security tradeoff for a hit rate or like what is this here
exactly? Like you got three years to pull this off. Joanna, good luck. Gooding luck, right? Because the minute things go off the rails, dude, [ __ ] Chararma is gonna be in there with her like bean counters and tech bros and cutting the [ __ ] out of you guys. So like I mean that's that's a situation that you're in. Like it's it's that I mean this is my cynical take on it and I know Joanna would disagree. Joanna actually actually commented on one of

the posts on LinkedIn like a day before Blizzcon. I was like shocked that she's bothering. So I do owe her apology. like she's done a good job.
What' she say? I think she said it was something to the effect of there's a lot of misconceptions about her level of gaming experience.
Yeah, she basically called me out on my [ __ ] that she had no experience in managing studios, I think, is what she was trying to say. And she said it very very nicely. [laughter] But between the lines, she's like, "You are a [ __ ] idiot, Eric. And look what I'm doing over here." That's what I That's the way I interpreted it anyway. But um nonetheless, I have to give her credit. You know, she's getting these guys to task. You know, making [ __ ] happen.
This feels like just a normal supply side playbook. Like, I think it's great. She's like kind of cracking the whip and everyone's back on the treadmill of like, "All right, let's start to reimagine. Maybe Diablo 5 is more of an expansion stance. Maybe that's the the scope. All right, let's get this into

more regular beats." I certainly think Diablo could absorb that. World of Warcraft, I think, is just like a normal playbook that you would endorse. how can you be against this, right? They're basically doubling down on what we know about MMOs, which is a bunch of crusty dudes who have been playing the game for a really long time and their sub communities and they're basically just saying like, look, here's a pathway to maintain your sub community, your server with your group of people in whatever environment you want. We'll get to the WoW section, but like it continues to be something that generates incredible amount of revenue that's grow. I mean, they've it seems like they've grown the per user monetization on World of Warcraft over time. Uh, no, you don't think so. All those WoW games though, they're in the same subscription, right?
Yes. For the for this new one, it's in the same sub, but it's I don't think there's inapp purchases, however, all of that's been stripped. There's an arpoo uplift you get. Although, correct me if I'm wrong, Eric.
There is some monetization that they're doing and they're trying to get more aggressive on it, but I think they're held back quite a bit by the culture. But the expansion stuff they're doing, the character buying, the incremental

like transfers and you know, race transfers, all these other things are adding do add up, but it's not nearly as significant, I think, as the subs.
Okay,
I don't know the number, but I would guess it's less than 20% of revenue. My concern is like having three live service games, MMOs with the team in Irvine. That seems like a [ __ ] heavy lift because it's not only just maintaining, you're actually building. You're adding content, you're adding races, you're adding classes, you're adding raids, you're adding dungeons. Like all these things are happening across three different iterations of the game that are completely forked, right? Like they're not the same tech as far as I can tell, right? They're all completely different. So I think that that's a huge challenge I think. But again, I'll find out more. I'm excited. But I So the other big story this week unrelated to what we were just talking about is this whole kurfuffle around Kojima, right? And this game Fizzant.

And this game was actually started like two years ago and it was basically supposedly the spiritual successor to Metal Girl Solid, which is actually very exciting. And so basically what's happening is this moving over PlayStation said no, Xbox and chararma said yes basically. So originally it was announced as a PlayStation exclusive like two years ago. Herman Holst, the new CEO boss over there really wanted to have this partnership with Cojima, but basically they canceled the project in June and now they're moving over to Xbox. I'm really split down the middle on this one. I I I actually don't know where I stand honestly on this because for Sony it was a [ __ ] terrible look, right? Like they already have a bad PR going on with the core, particularly the IGN type folk, right? And for Microsoft, this is a [ __ ] huge win. I mean, Chararma looks like a goddamn rock star to these same IGN folks, right? Because Cojima is beloved. However, however, it

is clear that Sony would not give up something like this unless it was looking pretty bad, right? Like in two years, Kojima must have been nowhere on this game and overbudget and like they're looking down the barrel of a gun. They're like, "We're not putting this money in this game." I mean, that's basically what this is saying because they know the PR hit they're going to take on this right now. This is the reason I'm a little bit concerned. Like if I were two years ago looking at this game, I would have done it because the spiritual successor of Mel Gusella is completely different than the two [ __ ] games that Cojima has made in the last I don't know 8 years which have been [ __ ] horrific, dude. Like they they they are like the most niche of niche games that haven't sold [ __ ] and likely lost tons of money for everybody who's been involved, right? So those are not the games I would make bets on. this particular game I would have right because yeah again these two games that they he's made we're exercising losing

money so that's why I'm a little bit torn here because I would have done this game but if this game is so far behind I don't know if Microsoft really wants this albatross around their neck right they're just shoveling money at Cojima trying to get this game out because if m if Sony doesn't like it then I don't know why Microsoft thinks that they can do anything and if Sony can't manage Kojima certainly these Microsoft tech bros and chararma can't manage with Cojima. So, I don't know. And the other big thing here is that there's no exclusive thing talked about, right? This is not an Xbox exclusive as far as I can tell. This is this is going to be available on PlayStation anyway, right? So, Sony's really not losing much at all from a revenue perspective. It's more just from a PR perspective.
Wouldn't that contract obligation um dissolve if the relationship dissolved? It's certainly not an exclusive to PlayStation anymore, but that doesn't m there was no evidence whatsoever that it's actually exclusive to Xbox.
They should do whatever they it's in the best interest of Microsoft, right? Like

they're not constrained though. Like maybe they do it, maybe they don't. They'll just figure it out, right?
That's true. But most likely they're going to do it. That's otherwise they would have said
they put on PlayStation.
Yes.
Why would they do that? That's not been the strategy they've been moving towards. Right. Sharma's back on the exclusivity train. Like she pulled Gears of War. Remember that was the whole thing the whole the whole drama.
There's no way financially for them to justify that. Even with PC,
you can say same thing for Gears. That's the whole point of exclusives though is that you're trading off unit sales.
If that were the case, they should have announced it, right? That would have been a big plus for them, but they didn't. They didn't announce that at all. They intentionally left it out, which implies
I think that's your best evidence. They want to show that in everyone's face. Only on Xbox.
I think in the short term, it's a huge PR win for Chararma and their team. I don't think it's going to be worth the headache of managing Cojima. As much as he's beloved and what a creative genius he is, the risk is the game is super niche and not profitable, which is still the risk because they might not be able to replicate the success of Metag. And if they don't have any potential for

upside from a platform exclusivity, I think I'd rather invest more money into teams at Blizzard, [laughter] right? If I were if I were Xbox, I don't know. But, you know, that's me. But anyway, it's a really interesting thing that's happening. You know, it's the Game of Thrones out there right now in terms of this, you know, Chararma trying to compete against Sony and, you know, we'll see. We'll see how they do with this this game and see how it evolves over time. All right. [clears throat] There was reporting on this EA merger with Bloomberg, and it was basically Siccilia at Bloomberg who said, "Unname sources familiar with the matter claimed that the merger between EA and Savvy Games Group is intended to ensure better coordination between its assets." So basically what they're saying is that Savvy is going to be the overlord of EA and the rest of the assets that the PIF has acquired. Now of course this makes absolutely total sense. You know centrally managing the gaming assets. Finally we get some good

coverage from Bloomberg because I think Jish and Shriers completely missed all context and all objectivity when it comes to this deal. If anybody's gonna be following this deal, like let's listen to Cecilia and see what she has to say about [laughter] it. That's what I think.
Anyway,
from the mobile perspective, I mean, Savvy has an incredible like UA and like this data infrastructure organization. So, there's going to be a lot of benefits to the collaboration. I feel like all the EA assets on mobile are just going to level up. I want to hear from Eric if you can, but I'm still assuming acquisition is a core growth driver here, right? And from my point of view, the focus should be on mobile. You know, the combined entity still skews towards console compared to the rest of the market. And so, what are they lacking? You know, they don't they're not lacking mobile, but they they could do it more mobile. They have, you know, no ad revenue exposure. Hardware is technically possible, you know. So, those are just like the last places to to firm up, but I'm still expecting more acquisitions. Eric, who do they buy

next? cuz like the next targets are, you know, fewer and fewer. The ones I see
like CD Project is one, but I know they're fiercely independent and they would likely never sell, right? They're like kings of the castle in Poland, right? So, they don't sell,
but they already overindex for for console and a little bit PC, I think. Do they care about that? Like, or are they just buying whatever?
I don't think so. I don't think so. I don't think it's really that strategic for them either. I mean, it is to some degree, right? Xbox makes total sense because as I've said a million times, there's no sense for this thing to be at Microsoft. The question is what the hell they do with the platform and the hardware, which I think has to be devested and and and done away with, frankly, but that's a whole other discussion.
I don't know, man.
Voodoo or triple dot.
No one wants that ad tech [ __ ] dude. No one wants that ad stuff. Like that ad stuff is garbage. I I
It's growing so fast.
I'm not getting this debate with you.

It's all gross. No one wants that. That's a shitty business.
I admire how how much you you you've stuck to your your guns despite the data. But um what we I mean even app posted like last quarter that they they see ad rev pays growing 10% Q over Q.
So the growth is there, right?
I think we should actually have this conversation cuz I'm a little bit wanting for real like data and information. A lot of what's being talked about with this ad tech stuff seems to be like the days of old where it's these hyper casual games that are a complete circle jerk where they're all paying each other to advertise on each other and so like 90% of the [ __ ] revenue is actually each other paying each other, right? That's it. Like that's the whole business, right? It looks like it feels like that's back again because everyone's talking about it but no one seems to be making any money on it. No one in these companies is talking about all this amazing adtech revenue and ad tech profitability that they're seeing. They're just not talking about it. You know, meanwhile, what's

really doing well in mobile is the Chinese and the Turkish, right, that have very little if any ad tech embedded within their games. There's some disconnect here, Mr. Josh. There there is. And I think it's it's super hard to measure. I think people have complained about web shop revenue being missing, but we we've never really had ad revenue reporting. And so from a a big co perspective, admonetized games, you know, if if AP titles lend themselves to being these big cinematic productions that have huge scale behind like one franchise, admonetized stuff, this is this is Netflix, right? I I'm not saying Netflix is slopp and and we should only make Star Wars, but I'm not saying we need Netflix and [ __ ] Star Wars and only one person can do Star Wars. Like there there's room for both and we need both in the ecosystem. What we can look at though to kind of deconstruct what's going with hyper casual. I mean I think first of all hyper casual is a term I think we need

to dead name that because it has such a connotation now.
Yeah. Yeah. Because when you look at it like cuz totally right. All we saw for so many years is downloads collapsing because that original business model was was really really rough. The original business model was essentially and this is this is a a gross simplification but let's say I'm I'm a a big AP monetized game and I want to make spends a dollar I get $2 over two or three years. These hyper casual games were sending a dollar and they were getting a buck five a buck 10 over 30 days and then nothing. And that sounds like a horrible ROI, but because it's happening so fast, you can do it. The problem was it was brittle. So when ad monetization, when like CPMs dropped 20%, they went from making a buck 10 to making 90s and things started to just collapse.
Plus, Apple and Google [ __ ] hated you guys. Like they hated them. They they

didn't Google Google loves ad monetized games because they're an ad network.
All right. Apple hated you.
Apple hated hated meta. They never really enforced that much against ad monetized.
Oh, I think I think I think that part of the part of the decision for IDFA was because of these games that were pushed down their throats.
I think they wanted to own distribution and I think Meta was in the way of that.
And I also think whatever.
Go ahead. Yeah. And so the I think the two diverging data sets we have, we don't have revenue to look at. Even though Sensor Tower now provides ad revenue, it's very early and it's very conservative and it starts in 2025.
If I were to leverage a term that I've heard from these ad tech guys since the beginning, if it's not measurable, it doesn't exist, right? So then therefore ade revenue doesn't exist because it's not measurable.
But that but that's amazing. That's the exact point is if you're a huge company and you're looking at all this data and it's not measurable, it doesn't exist.

So you don't focus on it. And so the ones that can measure it focus on it. And so what we end up in is this environment where all these massive companies, they're very overindexed to what we can measure, right? And but with the soft data that we have, what do we see in what sensor tower calls hyper casual? What we see is downloads down, time spent doubling. What does that mean? It means they're building retention. what hyper casual is now. These are 10% plus D30 retention games.
I know, but they're also not in the right regions. They're not in the right territories.
I understand why why are why why are we reinventing hybrid casual from first principles?
Hybrid casual uh if you if you look at the monetization schema today, there are three things that have worked really well and one that's spotty at best. I AP monetization crushes it. IAP with some ad rev crushes it. Adrev

crushes it. Like Block Blast is the biggest game by DAO in the world. Quarter billion a year in ad rev plus. But when you think of games that are mostly admonetized with a little bit of AP sprinkled in, a lot of those end up being games that just weren't able to drive the AP revenue properly because there's two essentially worlds. There's the big movie theater mega mega property and those monetize intent. They drive AP. And then there's Netflix. Netflix monetizes attention. The revenue per minute is lower, but you have this novelty factor that is just incredibly powerful.
And so, uh, you know, what we see is that there's this thing that hasn't been focused on by the biggest companies for a very long time, which is reasonable because you can't measure it. And so how do you justify such a massive expenditure?
What do you mean you can't measure what? What do you mean you can't measure engage?
It's really hard to measure ad revenue unless you're unless you're you can you can measure engagement, but how does you know 35 billion hours spent in half one

2026? You know, how how does that pay a bill when you can see that there's a 60 billion in AP post, you know, as a net? it it's a very hard business case to build when you can only see certain things and we see that in a lot of places right
but this is the whole point Eric has been arguing about why the why it's a dirty business why why this why the Saudis wouldn't want to be involved in this problem with ad stuff is it's always subject to these these companies fighting over policy at the national level and policy at the firm level like in a blink of an eye an entire model can exist or not exist by the UA gods right I mean story of of hyper casual, right? I mean,
it's a response to Yeah. It's a response to a set of incentives. Like the reason
hyper casual looked like SEO spam like we had on Google, like when you click a link and it would go there and you get hit with ads and it was like usually when you're browsing for recipes is because they know they weren't going to get the return. So, they needed to

monetize up front, right? And so, it's the same thing with hyper casual. You have to fit in all this crazy awful user experience up front because you don't have the retention. All of that decrease in CPM forces a migration to hybrid casual. It's migrator or die baby. And this is why the translation funnel has been survival of the fittest. It's not growing as a sector. When it it's growing, if you look at the term hybrid casual, you got to look at the entire size of the mass as it transitions and that mass has been declining in terms of size as it becomes harder to monetize ads would be at least a story I would tell. Josh,
habit has doubled in time spent in the last 5 years. It's the fastest growing by time investment.
I'm talking about like though if you're translating from hyper to hybrid, if you're looking at that as one complete bubble over time, it's shrinking over time. The complete mass of it. The other thing is if what you're saying is true, Josh, and truly like it's growing double digits or 40% or 100% or whatever the [ __ ] you're talking about,
the reality of it is that people that actually see this data like PE firms and

VC firms as much as like like to be critical, they'd be making investments here and they're not, right? There's no evidence that this has become like this boon that people are wanting to throw money at, right? And so they actually or Monopoly go, Josh, which one do you want? because I want you stumble guys.
So there is no evidence of what you're suggesting is true by the independent voices of those that make investments in this space
who's investing into into mobile games right now.
Dude, there's they're investing in Turkey constantly. How much money is being spent on the Chinese developers? Acquisitions of Scopely, acquisitions of Moonton, acquisitions of Monopoly Go. It's a regulatory nightmare because they know that any moment the platforms can say [ __ ] off and you're [ __ ] off, right? Like anyway. All right, moving on. Let's move on to Warcraft in sickness and in help in soft launch and in live ops through every meta shift

and every platform policy change. That's the kind of loyalty vibes built between your game and your players. AI powered targeting, a real metal layer, rorowass optimization that actually compounds. That's what makes Vibes the fastest growing loyalty platform in mobile gates. Till churn, do us a part. Vibes. VBS LCO. [music] Unless you've been living under a rock, you know this is web store rumbringer. 70% of top apps are using a web store. And the best ones, they're doing it with Appcharge. Do you want a $20,000 in-app purchase? [music] Yeah, Appch charge does that. Do you want to pretend that subscriptions are still a viable monetization strategy for games? Yeah, Appch charge even lets you do that. They get what high average revenue per paying customer means. And [music] they're already doing over half a billion dollars in transactions a year. So, are you going to be the first to do a $20,000 AP? Don't accept

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Saturi, it's the Japanese Zen Buddhist term for sudden enlightenment. That flash where everything clicks. We're told that Heroic Labs team had theirs when [music] they realized that most studios run live ops like a horoscope. Vague, kind of generic, same advice for everyone. So they built Sattorii, realtime experimentation, player level personalization, events that [music] actually respond to player behavior. Sayanara to your old live ops stand and Konichiwa to Sattorii from Heroid Labs. Warcraft Forever. This has been announced. This is a permanent classic style branch it looks like of the Warcraft skew. You're going from level one to level 60 in Azeroth. 1,000 quests, some new dungeons and

raids. There are some new some new content that's coming into it. It's included in your base sub, so it's still subscription based, although there's some content packs that they're selling. The number of SKs, to your point, Eric, that Blizzard has for World of Warcraft is pretty astonishing. They have the retail skew. They have the classic era. They have classic progression, Burning Crusade Classic, they have hardcore, season of discovery, Warcraft Forever, and Titan Reforge, which is the Chinese one. Uh, there actually is quite a bit of SKUs of this game. I mean, tell tell me tell me, Eric, what's what's going on here? I mean, I the only thing I'll add is like look at this. This franchise makes a lot of money. I've done a lot of back, you know, I tried to [ __ ] out some numbers and I was looking at between 500 and 1.5 billion was what I was getting annually for World of Warcraft. So, this is not even though the cultural discourse has decreased financially, this game is still doing gang busters. I'm giving the Blizzard, particularly the World of Warcraft team and the Diablo team in particular. Anyway, they're they're doing a great job of managing these franchises. I think WoW, the latest expansion has been really good, so they've kept the the classic has been great. Um, and now

they're bringing in WoW forever. And so, I think what they're doing is maintaining their subs pretty strongly, particularly in the West. And they also finally redid the deal with Netis, right, in China. So, let's bring that back
again. My my biggest concern is that they you know there were I think at peak the western subs and I could get this wrong was like between like five and six million like that was like the super peak like during the cataclysm days like that that was like the best and and the remainder I think it was like another eight or nine or something were in China that's that's my recollection right if you think six five or six of the peak here we've been sitting at two to three in that range in the west that are paying full boat subs Right. So maybe you can get to three to four with all these different SKs, but my my thinking is that they're just basically trying to maintain subs and increase the arpoo as you were suggesting um through other means of mostly expansion packs and other packs like you can buy a class,

right, with this new um expansion. Welcome Forever. You pay 30 bucks to get access to a race. My only worry is that there's only a limited amount of people that are willing to pay this. And I I remember this saying this at EA in 30 years ago. I mean, there's only a certain amount of people in the west that are willing to pay $15, $20 a month to play a MMO, right? Like, so it's like it's just a limited audience.
There's nothing else. Every every other game has pretty much failed except some like obscure ones like Runescape which are kind of set.
That is true. Yeah. Everything else is kind of fallen. Elder Scrolls, the Star Wars game, EverQuest 2 is kind of done. age. Yeah, all these games are kind of a lost and long I mean I think they have some like oh Final Fantasy was actually really competitive for a while but I think they fell off of the last expansion.
So anyway, I think they're doing the best they can in order to maintain this audience.
Uh but three SKs is a lot but I'm excited
and I should be able to get in the beta hopefully for forever in the next couple days. So I will report back.

This is awesome, Eric. Like this is a true forever franchise. I think they're just building trenches. I agree. This isn't this isn't a franchise that's going to like wake up overnight and have 10 million subs, but I I players are sticky as hell and this will just like this will just give off cash for like the next 10 to 20 years, 30 years,
dude.
I mean, this thing is just going to cash I' been I've been paying a yearly sub since the beginning.
Yeah.
So, they got me, dude. [laughter]
They got me. I don't think this thing is ever I think this thing will generate cash for 30 30 maybe 50. I don't know where the net present value of this thing I think is just enormous. I just don't think you can get rid of these players.
No, I don't think so.
Crusty players. How about Warog? This is the new Battlefield game from Bulkhead Studio which is in Derby UK. Have you guys ever heard of Derby UK? Uh I had actually had to look it up in the map. It is really in Hodunk nowhere. Uh, I can't even describe it using the terms

Americans would know. So, nowhere. Uh, it has sold 2.2 million copies. Looks like it's around 70 to 80 million in gross revenue. It has just around 430,000 peak concurrence. It was a game that had a closed access, then they had almost an early access period. Fascinating story. We're going to be talking a lot more on shooter monthly, but like the shooter market, we almost got bored in shooter monthly. We were talking about these black hole games, these games as a platform that are shooters, Fortnite, arena of Free Fire. Like, is the market just over? And instead, what we find is that there is still some demand that has to be satiated for these large scale Battlefield games. Hell at Loose, Squad, there's some other ones that have hung around Steam. But what does this mean? I don't I don't know beyond a revival of the Battlefield thesis that they aren't just satisfying these players in the way they should. The mechanics of Warogs are super interesting. They introduced like a whole new in round economy. So you got three teams battling for control of an

area and if you have the majority of your players on that control area then you move up score and then you can eventually win as on top of having this whole cash economy where if I do pro-social things, I drive my teammates to the battlefield. I help revive them. If I do in all these activities, I also earn in-game cash, which lets me buy guns, vehicles that I can spawn in game. So, a lot of the ideas that we've been talking about in shooter monthly and around in-game progression applied to like a battlefield setting. It is a milsim. I will tell you this right now. This is not a game that is going to scale. I would argue the console launch I don't think is going to do much. Uh I do think this will hang around the Steam top 100 and they've announced that they're going to continue to support it. It's a 100 person team out of again Derby UK. Gentlemen, are you a war dog yet?
Wolf.
No, but I have to defend I have to defend Derby's honor. I was born in Birmingham like Starburst, which is like 30 minutes away. Maybe maybe 45 minutes

away. So I Sorry. I'm sorry for you.
I I'm offended. [laughter]
What I mean, what's the most exciting thing about derby?
Oh, I'll pass on that one.
[laughter]
Poor Derby. No one to defend it. I
I'd have to I'd have to literally Google it. Yeah.
I mean, the the CEO was uh talking to Christopher Dring, who had an excellent podcast about the studio and where they've been, and one of the things he likes to advertise is that the labor is so much cheaper in derby. Like, I don't know if that's what you want to lead with.
Really?
Uh yeah. So, we can we can compete.
How big is a team? Do you know? I I think they said 100, but they've had layoffs along the way is what they've mentioned. So, I don't I don't know what they are at launch right now. If you remember, Tencent was originally the studio that had signed them, and they bought I believe the studio back, the founders.
Crazy. Yeah, I'll have to try it out. I didn't I didn't get a chance. And I doing these sweaty shooters is just not

in the cards for me these days. I'm actually much more interested in the next game, which I actually have played.
All right. Well, [ __ ] this then. Let's go talk about what we're all here for. Cute creature collectors. Animo is out today and we have blazing breaking news. It has passed when I just looked at it 125,000 CCU which is above what you're seeing here on the screen. This looks like a pretty successful launch. It is closing in on where Delta Force peaked on day three which had 118,000. Actually just sit above it. Next on I would say some comparables is Once Human at 230,000. It looks like it could be approaching that. Maybe it'll even hit the finals, which is at quarter of a million. The world is this game's oysters. Again, this is the creature collector. The IP. I would say you can just call it Pokemon meets Genchin. There's a whole lot going on here. There's original creature designs. I have just preloaded the game on both mobile and on Steam where it's

been released. Thank god Fun Plus did not succumb to the poison of the EGS sales team who if you remember has been they've been getting all of these anime games on EGS with exclusivity. So Ginchin Impact remember had not only direct distribution but was also on EGS. You remember Love Nikki?
Yeah.
There's someone in this team trying to use anime based games and like haunt their future by forcing them on EGS as a way to acquire people to the platform. And someone in fun plus stood up and said
that might be my friend that might be my friend Kyle who likes anime.
We will be free.
Uh
so yeah it has not la it has not launched on mobile yet. So it launches on mobile next week. I played the intro sequence and holy crap is this game beautiful. Like I mean this is such a departure for such a departure for fun plus that it's actually remarkable that they actually executed it to some degree. So,
this this makes janky Forex games, Eric. Janky Forex games, and this is it.
I know. I know. I know. I mean, I I I am impressed. I did actually catch up with

Petravic uh last week. So, um and he's really excited about this, but um yeah, I mean, it looks really beautiful. It looks great. So, we'll see if it has the depth and the and the spending, right? So, we'll see like what the business model looks like um from a spending perspective to see how this thing nets out. But I think if the true test is going to be on mobile clearly um for the scale distribution
what where is that take coming from? Why why can this not absolutely crush on PC console?
All right. All right. I don't think on console but on PC maybe on Steam.
Why not? I mean this is this is Paul World did did fairly well. I mean why why this this has total total audience accessibility on all platforms. It is an impressive feat and one that many many companies have been trying to do is do a true crossplatform free-to-play game. Um, so we will see how well it actually does, but so far so

good and uh we'll report back after played it for a while.
Agreed. We will report back. I can already tell you like some of the innovations on how they've done evolutions and how they've dealt with like for instance, okay, it might be raining and so it's more likely that a Nemo that has a rain feature or like a thunder feature if it's thundering might spawn. Like those things make so much sense and are obvious designs that Pokemon hasn't endorsed as much as they should. They have branching evolutions already. So like okay, I can have varants or I can involve a given anemo into different branches. So again, you can have like the same base design but almost include these variants. I mean, this is obvious stuff Pokemon I think should have done a really long time ago. Twining is where you combine yourself with your Animo and it becomes a little bit more action RPG. Give us a week.
Yeah, that's the part actually when I started playing that was the part that was really interesting because I I didn't follow like what was happening, but when you Yeah, you combine yourself with your your uh amiibo. Sorry. a Nemo.

Nemo.
Oops. Um, yeah, it becomes like an action RPG, dude, where you have like powers. It's like, you know, it's like playing MMO at that point. And so that that's very, very cool. And it obviously each anemo, sorry, I'm just messing this thing up. Each Animo will be completely unique in terms of his powers and stuff. And so I could totally upgrade. I can imagine spending insane amounts of money to upgrade an Neo your your best and then require I mean, I know exactly how they designed this thing, but I have to play and see. But it must is pay to win though, right? Pay to
I mean I don't know. I don't know. I haven't I haven't I'm not deep enough in monetization. I'm I'm getting through the progression systems. Let's see.
Fun plus doesn't make a pay to win pay to progress. There there's something seriously wrong. So [laughter] it's got to be they're not going to fall into that.
It it feels easy to layer a gotcha mechanic into this. So let's see.
All right. Let's we'll come back at this and see how well it monetizes. Actually, we'll see, you know, real time on on sensor tower. So that'll be great.
All right. Is that it? That's all she

wrote. That's all she wrote. Episode 401 in the can.
Next week we'll get we'll get we'll get her back. We need her back. [laughter]
Thank god. Jen, please save me.
Peace.
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